Financial Institutions Must “Know Their Customers”
Conducting business with financial institutions regulated by the Bank of Jamaica requires understanding your rights and responsibilities under the country’s anti-money laundering (AML) and combating the financing of terrorism (CFT) laws.
What do Financial Institutions Need to Know?
According to the Guidance Notes issued by the Bank of Jamaica, financial institutions must “know their customers” by:
- Verifying customer identity
- Obtaining information about their business and transactions
- Identifying suspicious transactions and reporting them to the authorities
These requirements are crucial in combating money laundering and financing terrorism.
The Importance of AML/CFT Regulations
The international community has been grappling with the problems of money laundering and financing terrorism for many years. Money laundering is the act of disguising the proceeds of crime, while financing terrorism involves offering financial services or making property or funding available to further terrorist purposes.
Jamaica has passed three pieces of legislation to combat these crimes: the Money Laundering Act, the Drug Offences (Forfeiture of Proceeds) Act, and the Terrorism Prevention Act. Non-compliance with these laws can result in severe penalties, including fines and imprisonment.
Consequences of Non-Compliance
Financial institutions that fail to comply with AML/CFT regulations may be subject to:
- Regulatory sanctions, including suspension or revocation of their license to operate
- Flagging as a non-cooperative country/territory by the international community
- Difficulty in maintaining correspondent accounts overseas and participating in the global financial system
What Can You Do?
The public is encouraged to view the Guidance Notes issued by the Bank of Jamaica on its website at www.boj.org.jm for more information on AML/CFT regulations and their responsibilities as customers of cambios and other financial institutions.
Remember, it’s essential to understand your rights and responsibilities when conducting business with financial institutions regulated by the Bank of Jamaica. By knowing your obligations under AML/CFT laws, you can help prevent money laundering and financing terrorism in Jamaica.